April 4, 2017
Indiana doesn't have a specific motor vehicle exemption, but you can use Indiana's wildcard exemption to protect equity in your car, truck, van, or another vehicle if you file for bankruptcy. Here you’ll find information about the Indiana's wildcard exemption, including how much it is, how it works for married couples, and more.
For more information about exemptions, including how they work and which ones you can use, go to Bankruptcy Exemptions. You can find additional motor vehicle exemption information by reading Motor Vehicle Exemption in Bankruptcy.
Indiana’s exemptions play a large role in determining whether the bankruptcy trustee (the official tasked with overseeing your case) can take your vehicle to repay your unsecured creditors in a Chapter 7 bankruptcy. If Indiana’s wildcard exemption will protect all of your vehicle's equity (and you choose to use it for that purpose), then the trustee cannot sell it. If the exemption isn't sufficient to cover your car's equity, the trustee is likely to sell your car to repay your unsecured creditors. For details, see The Motor Vehicle Exemption: Can You Keep Your Car in Chapter 7 Bankruptcy?
Keep in mind that even if your car is safe from the bankruptcy trustee, the lender might repossess it during or after bankruptcy if you fall behind on your payment. To learn more, see Your Car in Chapter 7 Bankruptcy and If You Are Behind on Your Car Payments, Can Chapter 7 Help?
Indiana law allows you to exempt up to $10,250 of any property of your choosing, which includes motor vehicles. Whatever you do not use to protect other property, you can use to protect your car. Married debtors who file jointly can double the amount and protect up to $20,500 in any property in which they both hold an ownership interest. (Learn more in The Indiana Wildcard Exemption in Bankruptcy.)
Some states allow bankruptcy filers to use the federal bankruptcy exemptions instead of state exemptions, but Indiana isn't one of these states.
The wildcard exemption covers any personal property, which includes any vehicles, insurance proceeds or any other property or cash associated with the vehicle.
You can find Indiana’s wildcard exemption on the Indiana General Assembly website at Ind. Code Ann. 34-55-10-2(c)(2).
The exemption laws in Indiana are scheduled to change in 2022.